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San Francisco Chronicle
24 minutes ago
- Business
- San Francisco Chronicle
Federal court blocks Trump's tariffs. Here's what to know
WASHINGTON (AP) — A federal court in New York handed President Donald Trump a big setback Wednesday, blocking his audacious plan to impose massive taxes on imports from almost every country in the world. A three-judge panel of the U.S. Court of International Trade ruled that Trump overstepped his authority when he invoked the 1977 International Emergency Economic Powers Act to declare a national emergency and justify the sweeping tariffs. The tariffs overturned decades of U.S. trade policy, disrupted global commerce, rattled financial markets and raised the risk of higher prices and recession in the United States and around the world. The U.S. Court of International Trade has jurisdiction over civil cases involving trade. Its decisions can be appealed to the U.S. Court of Appeals for the Federal Circuit in Washington and ultimately to the Supreme Court, where the legal challenges to Trump' tariffs are widely expected to end up. Which tariffs did the court block? The court's decision blocks the tariffs Trump slapped last month on almost all U.S. trading partners and levies he imposed before that on China, Mexico and Canada. On April 2, Trump imposed so-called reciprocal tariffs of up to 50% on countries with which the United States runs a trade deficit and 10% baseline tariffs on almost everybody else. He later suspended the reciprocal tariffs for 90 days to give countries time to agree to reduce barriers to U.S. exports. But he kept the baseline tariffs in place. Claiming extraordinary power to act without congressional approval, he justified the taxes under IEEPA by declaring the United States' longstanding trade deficits 'a national emergency.' In February, he'd invoked the law to impose tariffs on Canada, Mexico and China, saying that the illegal flow of immigrants and drugs across the U.S. border amounted to a national emergency and that the three countries needed to do more to stop it. The U.S. Constitution gives Congress the power to set taxes, including tariffs. But lawmakers have gradually let presidents assume more power over tariffs — and Trump has made the most of it. The tariffs are being challenged in at least seven lawsuits. In the ruling Wednesday, the trade court combined two of the cases — one brought by five small businesses and another by 12 U.S. states. The ruling does leave in place other Trump tariffs, including those on foreign steel, aluminum and autos. But those levies were invoked under a different law that required a Commerce Department investigation and could not be imposed at the president's own discretion. Why did the court rule against the president? The administration had argued that courts had approved then-President Richard Nixon's emergency use of tariffs in a 1971 economic and financial crisis that arose when the United States suddenly devalued the dollar by ending a policy that linked the U.S. currency to the price of gold. The Nixon administration successfully cited its authority under the 1917 Trading With Enemy Act, which preceded and supplied some of the legal language later used in IEPPA. The court disagreed, deciding that Trump's sweeping tariffs exceeded his authority to regulate imports under IEEPA. It also said the tariffs did nothing to deal with problems they were supposed to address. In their case, the states noted that America's trade deficits hardly amount of a sudden emergency. The United States has racked them up for 49 straight years in good times and bad. So where does this leave Trump's trade agenda? Wendy Cutler, a former U.S. trade official who is now vice president at the Asia Society Policy Institute, says the court's decision "throws the president's trade policy into turmoil.' 'Partners negotiating hard during the 90-day day tariff pause period may be tempted to hold off making further concessions to the U.S. until there is more legal clarity," she said. Likewise, companies will have to reassess the way they run their supply chains, perhaps speeding up shipments to the United States to offset the risk that the tariffs will be reinstated on appeal. The trade court noted that Trump retains more limited power to impose tariffs to address trade deficits under another statute, the Trade Act of 1974. But that law restricts tariffs to 15% and only for 150 days with countries with which the United States runs big trade deficits. For now, the trade court's ruling 'destroys the Trump administration's rationale for using federal emergency powers to impose tariffs, which oversteps congressional authority and contravenes any notion of due process,' said Eswar Prasad, professor of trade policy at Cornell University. "The ruling makes it clear that the broad tariffs imposed unilaterally by Trump represent an overreach of executive power.''
Boston Globe
28 minutes ago
- Business
- Boston Globe
Federal court blocks Trump's tariffs. Here's what to know.
The U.S. Court of International Trade has jurisdiction over civil cases involving trade. Its decisions can be appealed to the U.S. Court of Appeals for the Federal Circuit in Washington and ultimately to the Supreme Court, where the legal challenges to Trump' tariffs are widely expected to end up. Get Starting Point A guide through the most important stories of the morning, delivered Monday through Friday. Enter Email Sign Up Which tariffs did the court block? Advertisement The court's decision blocks the tariffs Trump slapped last month on almost all U.S. trading partners and levies he imposed before that on China, Mexico and Canada. On April 2, Trump imposed so-called reciprocal tariffs of up to 50% on countries with which the United States runs a trade deficit and 10% baseline tariffs on almost everybody else. He later suspended the reciprocal tariffs for 90 days to give countries time to agree to reduce barriers to U.S. exports. But he kept the baseline tariffs in place. Claiming extraordinary power to act without congressional approval, he justified the taxes under IEEPA by declaring the United States' longstanding trade deficits 'a national emergency.' Advertisement In February, he'd invoked the law to impose tariffs on Canada, Mexico and China, saying that the illegal flow of immigrants and drugs across the U.S. border amounted to a national emergency and that the three countries needed to do more to stop it. The U.S. Constitution gives Congress the power to set taxes, including tariffs. But lawmakers have gradually let presidents assume more power over tariffs — and Trump has made the most of it. The tariffs are being challenged in at least seven lawsuits. In the ruling Wednesday, the trade court combined two of the cases — one brought by five small businesses and another by 12 U.S. states. The ruling does leave in place other Trump tariffs, including those on foreign steel, aluminum and autos. But those levies were invoked under a different law that required a Commerce Department investigation and could not be imposed at the president's own discretion. Why did the court rule against the president? The administration had argued that courts had approved then-President Richard Nixon's emergency use of tariffs in a 1971 economic and financial crisis that arose when the United States suddenly devalued the dollar by ending a policy that linked the U.S. currency to the price of gold. The Nixon administration successfully cited its authority under the 1917 Trading With Enemy Act, which preceded and supplied some of the legal language later used in IEPPA. The court disagreed, deciding that Trump's sweeping tariffs exceeded his authority to regulate imports under IEEPA. It also said the tariffs did nothing to deal with problems they were supposed to address. In their case, the states noted that America's trade deficits hardly amount of a sudden emergency. The United States has racked them up for 49 straight years in good times and bad. Advertisement So where does this leave Trump's trade agenda? Wendy Cutler, a former U.S. trade official who is now vice president at the Asia Society Policy Institute, says the court's decision 'throws the president's trade policy into turmoil.' 'Partners negotiating hard during the 90-day day tariff pause period may be tempted to hold off making further concessions to the U.S. until there is more legal clarity,' she said. Likewise, companies will have to reassess the way they run their supply chains, perhaps speeding up shipments to the United States to offset the risk that the tariffs will be reinstated on appeal. The trade court noted that Trump retains more limited power to impose tariffs to address trade deficits under another statute, the Trade Act of 1974. But that law restricts tariffs to 15% and only for 150 days with countries with which the United States runs big trade deficits. For now, the trade court's ruling 'destroys the Trump administration's rationale for using federal emergency powers to impose tariffs, which oversteps congressional authority and contravenes any notion of due process,' said Eswar Prasad, professor of trade policy at Cornell University. 'The ruling makes it clear that the broad tariffs imposed unilaterally by Trump represent an overreach of executive power.'' AP Writer Lindsay Whitehurst contributed to this story.
Yahoo
35 minutes ago
- Business
- Yahoo
U.S. Court of International Trade Blocks Trump's ‘Liberation' Tariffs
The Court of International Trade has ruled that President Donald Trump overstepped his authority in invoking the International Emergency Economic Powers Act (IEEPA) to impose sweeping tariffs on the country's biggest trading partners. The New York-based federal judicial panel comprised of nine presidentially appointed judges handed down a decision to block the Commander in Chief from levying the double-digit duties, writing Wednesday that 'The Worldwide and Retaliatory Tariff Orders exceed any authority granted to the President by IEEPA to regulate importation by means of tariffs.' More from Sourcing Journal Trump Says US Should Produce Tech and Tanks, Not T-Shirts and Sneakers Urban Outfitters Spurns Air for Ocean Freight as Tariffs Settle in Trump Threatens EU With 50% Duties, Says Trade Talks 'Going Nowhere' The judges who heard the case included Trump appointee Timothy Reif along with Gary Katzman, who was appointed by Barack Obama, and Jane Restani, who took to the bench during Ronald Reagan's presidency. IEEPA—a niche trade law used rarely in the modern era and scarcely known by average citizens—was put in place by Jimmy Carter in 1977. It authorizes the president to regulate international commerce under the circumstance of an 'unusual and extraordinary threat' to American security or the economy originating outside of the country. Once the president declares a national emergency under IEEPA, they can block transactions with other nations, freeze assets and confiscate property to defend U.S. interests. Trump invoked the law on April 2—'Liberation Day'—when he announced 'reciprocal' duties on about 90 countries, as well as an international baseline tariff of 10 percent. The 25-percent duties separately levied on Mexico and Canada, spurred by complaints about border security and fentanyl trafficking, were also invalidated by Wednesday's decision. Trump's repeated claims that trade imbalances with other nations amount to fleecing the U.S. and its industrial base don't rise to the standard of a national emergency under IEEPA, the court's decision surmised. Therefore, the president can't circumvent Congress to impose the duties on July 9, when their previous deferral expires. The decision doesn't apply to 25-percent tariffs on steel and aluminum, autos and parts that Trump imposed using Section 232 of the Trade Expansion Act of 1962, though. The Commerce Department is investigating whether the importation of those items poses a risk to national security. The administration has 10 days to comply with the ruling and stop the tariffs, though it quickly and quietly appealed the decision. As of end-of-day in Washington, the president had not even Truthed his stance on the matter, though White House spokesperson Kush Desai indicated that the administration would use 'every lever of executive power to address this crisis.' He added that 'It is not for unelected judges to decide how to properly address a national emergency.' The trade court complaints stemmed from lawsuits filed by small businesses and American companies, as well as 15 complaints from states including California, New York and Oregon. 'The courts agree—Donald Trump exceeded his authority when he tried to impose his chaotic, disruptive tariffs that have done nothing but increase costs for American families,' the Golden State's governor, Gavin Newsom, wrote on X Wednesday evening. Oregon Attorney General Dan Rayfield, who filed the state's complaint against the Trump administration, called the Court of International Trade's decision 'big news.' 'This means we won't see the uncertainty when it comes to prices that we pay in the grocery store. It'll be more certainty for small businesses. It means that household families are going to have that $3,800 increase every year as a result of these tariffs,' he tweeted.
Yahoo
35 minutes ago
- Business
- Yahoo
Federal court blocks Trump's tariffs. Here's what to know
WASHINGTON (AP) — A federal court in New York handed President Donald Trump a big setback Wednesday, blocking his audacious plan to impose massive taxes on imports from almost every country in the world. A three-judge panel of the U.S. Court of International Trade ruled that Trump overstepped his authority when he invoked the 1977 International Emergency Economic Powers Act to declare a national emergency and justify the sweeping tariffs. The tariffs overturned decades of U.S. trade policy, disrupted global commerce, rattled financial markets and raised the risk of higher prices and recession in the United States and around the world. The U.S. Court of International Trade has jurisdiction over civil cases involving trade. Its decisions can be appealed to the U.S. Court of Appeals for the Federal Circuit in Washington and ultimately to the Supreme Court, where the legal challenges to Trump' tariffs are widely expected to end up. Which tariffs did the court block? The court's decision blocks the tariffs Trump slapped last month on almost all U.S. trading partners and levies he imposed before that on China, Mexico and Canada. On April 2, Trump imposed so-called reciprocal tariffs of up to 50% on countries with which the United States runs a trade deficit and 10% baseline tariffs on almost everybody else. He later suspended the reciprocal tariffs for 90 days to give countries time to agree to reduce barriers to U.S. exports. But he kept the baseline tariffs in place. Claiming extraordinary power to act without congressional approval, he justified the taxes under IEEPA by declaring the United States' longstanding trade deficits 'a national emergency.' In February, he'd invoked the law to impose tariffs on Canada, Mexico and China, saying that the illegal flow of immigrants and drugs across the U.S. border amounted to a national emergency and that the three countries needed to do more to stop it. The U.S. Constitution gives Congress the power to set taxes, including tariffs. But lawmakers have gradually let presidents assume more power over tariffs — and Trump has made the most of it. The tariffs are being challenged in at least seven lawsuits. In the ruling Wednesday, the trade court combined two of the cases — one brought by five small businesses and another by 12 U.S. states. The ruling does leave in place other Trump tariffs, including those on foreign steel, aluminum and autos. But those levies were invoked under a different law that required a Commerce Department investigation and could not be imposed at the president's own discretion. Why did the court rule against the president? The administration had argued that courts had approved then-President Richard Nixon's emergency use of tariffs in a 1971 economic and financial crisis that arose when the United States suddenly devalued the dollar by ending a policy that linked the U.S. currency to the price of gold. The Nixon administration successfully cited its authority under the 1917 Trading With Enemy Act, which preceded and supplied some of the legal language later used in IEPPA. The court disagreed, deciding that Trump's sweeping tariffs exceeded his authority to regulate imports under IEEPA. It also said the tariffs did nothing to deal with problems they were supposed to address. In their case, the states noted that America's trade deficits hardly amount of a sudden emergency. The United States has racked them up for 49 straight years in good times and bad. So where does this leave Trump's trade agenda? Wendy Cutler, a former U.S. trade official who is now vice president at the Asia Society Policy Institute, says the court's decision "throws the president's trade policy into turmoil.' 'Partners negotiating hard during the 90-day day tariff pause period may be tempted to hold off making further concessions to the U.S. until there is more legal clarity," she said. Likewise, companies will have to reassess the way they run their supply chains, perhaps speeding up shipments to the United States to offset the risk that the tariffs will be reinstated on appeal. The trade court noted that Trump retains more limited power to impose tariffs to address trade deficits under another statute, the Trade Act of 1974. But that law restricts tariffs to 15% and only for 150 days with countries with which the United States runs big trade deficits. For now, the trade court's ruling 'destroys the Trump administration's rationale for using federal emergency powers to impose tariffs, which oversteps congressional authority and contravenes any notion of due process,' said Eswar Prasad, professor of trade policy at Cornell University. "The ruling makes it clear that the broad tariffs imposed unilaterally by Trump represent an overreach of executive power.'' _____ AP Writer Lindsay Whitehurst contributed to this story.
Yahoo
an hour ago
- Business
- Yahoo
Federal court blocks Trump's tariffs. Here's what to know
WASHINGTON (AP) — A federal court in New York handed President Donald Trump a big setback Wednesday, blocking his audacious plan to impose massive taxes on imports from almost every country in the world. A three-judge panel of the U.S. Court of International Trade ruled that Trump overstepped his authority when he invoked the 1977 International Emergency Economic Powers Act to declare a national emergency and justify the sweeping tariffs. The tariffs overturned decades of U.S. trade policy, disrupted global commerce, rattled financial markets and raised the risk of higher prices and recession in the United States and around the world. The U.S. Court of International Trade has jurisdiction over civil cases involving trade. Its decisions can be appealed to the U.S. Court of Appeals for the Federal Circuit in Washington and ultimately to the Supreme Court, where the legal challenges to Trump' tariffs are widely expected to end up. Which tariffs did the court block? The court's decision blocks the tariffs Trump slapped last month on almost all U.S. trading partners and levies he imposed before that on China, Mexico and Canada. On April 2, Trump imposed so-called reciprocal tariffs of up to 50% on countries with which the United States runs a trade deficit and 10% baseline tariffs on almost everybody else. He later suspended the reciprocal tariffs for 90 days to give countries time to agree to reduce barriers to U.S. exports. But he kept the baseline tariffs in place. Claiming extraordinary power to act without congressional approval, he justified the taxes under IEEPA by declaring the United States' longstanding trade deficits 'a national emergency.' In February, he'd invoked the law to impose tariffs on Canada, Mexico and China, saying that the illegal flow of immigrants and drugs across the U.S. border amounted to a national emergency and that the three countries needed to do more to stop it. The U.S. Constitution gives Congress the power to set taxes, including tariffs. But lawmakers have gradually let presidents assume more power over tariffs — and Trump has made the most of it. The tariffs are being challenged in at least seven lawsuits. In the ruling Wednesday, the trade court combined two of the cases — one brought by five small businesses and another by 12 U.S. states. The ruling does leave in place other Trump tariffs, including those on foreign steel, aluminum and autos. But those levies were invoked under a different law that required a Commerce Department investigation and could not be imposed at the president's own discretion. Why did the court rule against the president? The administration had argued that courts had approved then-President Richard Nixon's emergency use of tariffs in a 1971 economic and financial crisis that arose when the United States suddenly devalued the dollar by ending a policy that linked the U.S. currency to the price of gold. The Nixon administration successfully cited its authority under the 1917 Trading With Enemy Act, which preceded and supplied some of the legal language later used in IEPPA. The court disagreed, deciding that Trump's sweeping tariffs exceeded his authority to regulate imports under IEEPA. It also said the tariffs did nothing to deal with problems they were supposed to address. In their case, the states noted that America's trade deficits hardly amount of a sudden emergency. The United States has racked them up for 49 straight years in good times and bad. So where does this leave Trump's trade agenda? Wendy Cutler, a former U.S. trade official who is now vice president at the Asia Society Policy Institute, says the court's decision "throws the president's trade policy into turmoil.' 'Partners negotiating hard during the 90-day day tariff pause period may be tempted to hold off making further concessions to the U.S. until there is more legal clarity," she said. Likewise, companies will have to reassess the way they run their supply chains, perhaps speeding up shipments to the United States to offset the risk that the tariffs will be reinstated on appeal. The trade court noted that Trump retains more limited power to impose tariffs to address trade deficits under another statute, the Trade Act of 1974. But that law restricts tariffs to 15% and only for 150 days with countries with which the United States runs big trade deficits. For now, the trade court's ruling 'destroys the Trump administration's rationale for using federal emergency powers to impose tariffs, which oversteps congressional authority and contravenes any notion of due process,' said Eswar Prasad, professor of trade policy at Cornell University. "The ruling makes it clear that the broad tariffs imposed unilaterally by Trump represent an overreach of executive power.'' _____ AP Writer Lindsay Whitehurst contributed to this story. Paul Wiseman, The Associated Press Sign in to access your portfolio
